The recession has made it especially difficult for retailers to sell their products and made consumers less eager to open up their wallets. In recent research by advertising agency Leo Burnett Worldwide it shows that 80% to 90% of people are willing to trade off or trade down when it comes to shopping. Companies such as Campbell Soup, Newell Rubbermaid, Johnson & Johnson are using marketing techniques that appeal to their target audience such as family and staying at home, as well as keeping up with their audience, private labels and consumer high anxiety.
www.forbes.com/2010/02/04/marketing-brand-strategy-entrepreneurs-sales-marketing-wharton.html?boxes=Homepagechannels
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This immediately struck me as being very applicable to class. This is what we learned about substitute/replacement products. In a bad economy, people will buy cheaper, lower quality goods rather than expensive name-brands. This article shows the affects of that on the name brand companies: they are trying to appeal to customers in different ways to keep their sales.
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I think people are looking for more deals right now, especially with limited budgets. It seems as though these companies should be figuring out ways to entice people to pay more for products rather than clever marketing. They should be figuring out how to lower their prices while retaining the quality that people know.
ReplyDeleteAs people have less money to spend they are going to attempt to find ways to save. One of the easiest ways to do so is to buy off brands which sell the same products for cheaper because their names are not as notable. I agree with what was mentioned above that big name brands need to find a way to lower their prices in order to stay competitive. A
ReplyDeleteI understand and fully agree with the desire for people to find ways to save. Times right now are hard on everyone, including companies that have thrived for years. Seeing this shows me that our economy is really in a predicament. As much as I believe that these companies should lower their prices to help accomodate the people of America, I also know that this would be very difficult for these companies to do because they are struggling just as much as everyone else.
ReplyDeletePeople are facing the trade-off of staying in or eating out as well as eating an inferior good or a normal good. Depending on the financial situations these families are in, the normal good producing companies that have new advertisements may not be making any impact at all. T
ReplyDeleteThe first word come up to my mind is"substitude" and it made me reviewed what we learned in the class.
ReplyDeleteDue to the finacial crisis, consumers became more rational when they shopping, not only consider about the brand, but also compare the price based on the quality of the goods. people have to face to the trade-off if they want to save money. But from the other side, it's hard for those companies to lower price because of the their goods' market positioning.
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